Packaging / Advertising & Office

On September 25, according to Reuters News:

On September 24, the Dow Jones Industrial Index and the S&P 500 in the US stock market rose slightly on Friday. The rise of Tesla's TSLA.O and FacebookFB.O overwhelmed the decline of Nike. After a week of volatile trading, the two stock indexes climbed slightly on a weekly basis.

Sportswear company Nike plunged 6.3%, causing the biggest drag on the Dow and S&P 500. Earlier, Nike issued pessimistic sales forecasts and warned that due to tight supply chains, there may be delays in the holiday shopping season.

Foot LockerFL.N, a shoe retailer, also fell sharply.

Production and supply chains are hit

Is Nike's stock price still going up?

Almost all Nike factories in Vietnam have been closed due to the local government’s anti-epidemic policy. The company’s CFO Matthew Friend said, “Judging from the past experience of closing factories due to the new crown, it will still take some time to restart and resume full production. "So far, the company's production in Vietnam has been suspended for 10 weeks, and it will still take several months to resume production.

It is not only Nike that is deeply affected by the production problems in Vietnam, but also its peers Abercrombie&Fitch and Adidas. Retailers’ inventories are now close to historical lows. According to data from the St. Louis Fed earlier, at the end of July, stores had only enough inventory for more than one month of sales, a sharp drop from the level of the last two months in April last year. Nike said that the inventory at the end of the last quarter was $6.7 billion, the same as the same period last year, and slightly lower than the $6.9 billion in the previous quarter.

In addition to production problems, the supply chain crisis is also a big problem.

The stock brokerage company BTIG downgraded Nike’s stock rating this month and prompted risks. The agency believes that starting from this holiday and at least until next spring, the risk of Nike’s massive cancellation of orders will rise sharply. Because "Last quarter, the transportation time in North America has been greatly extended, and now it is almost twice as long as before the epidemic. The company is also facing similar problems in Europe, the Middle East, and Africa."

Matt Friend previously told analysts that it takes an average of 80 days to ship goods from Asia to Nike headquarters.